This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Economy Presents Opportunities for Produce

During the past year, the down economy has caused a significant shift in consumer purchasing behaviors, presenting both challenges and opportunities to the global produce industry, according to Linda Cox, senior account executive at Bellevue, Wash.-based The Hartman Group. In general, grocery and food retail sales have not suffered as greatly as industries such as travel, recreation

ANAHEIM, Calif. — During the past year, the down economy has caused a significant shift in consumer purchasing behaviors, presenting both challenges and opportunities to the global produce industry, according to Linda Cox, senior account executive at Bellevue, Wash.-based The Hartman Group.

In general, grocery and food retail sales have not suffered as greatly as industries such as travel, recreation and housing during the recession, noted Cox, who was scheduled to speak here last week at the Produce Marketing Association's 2009 Fresh Summit International Convention and Exposition in a workshop called “Marketing to the New Cost-Conscious Consumer.”

Food retail is generally considered to be a recession-resistant business, because people must eat and food budgets can only be trimmed so far. And Cox told SN that recent research has found that cutting back on grocery expenditures is not a particularly effective means of adjusting a household budget to meet reduced net income.

“Indeed, our research demonstrates that consumers began observing higher food prices in the early part of 2008, well before the market volatility that followed within housing, financial, employment and equity sectors,” she said. “These prices hikes were generally met with pragmatic acceptance.”

Shoppers are now focusing their attention not only on value — which is traditionally defined as some combination of price, quantity and quality — but also on notions of utility and consumption, Cox said.

“They are much more sensitive to produce waste than they have been in the past and with fruits, less likely to take a risk on optimal ripeness without a taste test first. One effective strategy is to unbundle vegetables similarly to fruits so that the consumer can purchase exactly what they need.”

Julia Stewart, public relations director for PMA, said that while consumers are dining out less and preparing meals at home more, that doesn't automatically mean retail sales will go up.

“We have to keep in mind that a lot of consumers have forgotten how to prepare meals — they need our help,” Stewart said.

“The produce department can help on that front by making sure shoppers get the information and tools they need, from storage and handling tips to recipe ideas.”

“They are much more mindful of how the food was produced in addition to the quality of the food itself,” Cox said.

“Because of this continued and growing interest into the how and why behind food production, retailers that employ a true dialogue with their consumers will see greatest success. Consumers like to be surprised, delighted and engaged.

Stewart agreed.

“While consumers may be looking at their receipt totals more closely, they don't want to sacrifice quality in the process,” she said.

“So in an effort to save our customers money in the short term, we need to be careful not to make decisions that sacrifice produce quality in the process. Our consumer surveys have told us time and again that produce is an important driver of store choice, and consumers are very willing to switch stores to get better produce.”

Stewart added that PMA's research shows that consumers are more price-conscious, but they aren't ready to abandon fresh produce yet for frozen or canned.

“What they are doing is focusing more on seasonal, staples and standbys — for example, potatoes and apples,” Stewart noted.

Another interesting trend The Hartman Group found concerns the use of coupons.

“With the decline of local newspapers, more and more consumers are looking for bargains online,” Cox told SN.

“This is a much more difficult venue for a traditional marketer to navigate, given the plethora of choices. Mommy groups are a good source and a surprising number of respondents reported regularly purchasing coupons on secondary markets such as eBay.”

Another positive trend Cox said that The Hartman Group sees for produce in particular is that consumers are turning away from supplements in great numbers and increasingly looking to specific foods to provide naturally occurring nutritional benefits.

PMA FRESH SUMMIT

WORKSHOP SERIES II

SATURDAY, OCT. 3, 9:35-10:50 A.M. ROOM 304 AB

PRODUCE MARKETING PART 1: MARKETING TO THE NEW COST-CONSCIOUS CONSUMER